Since 1926, the S&P 500's total return has been significantly driven by dividends, accounting for 32% of returns. Recent analysis shows high-yield dividend stocks have performed notably well, with a 9.18% annualized return over the last fifty years, compared to 3.95% for non-payers. Amid a stable federal funds rate and persistent inflation, experts suggest that investors consider high-yield dividend stocks as they remain attractive. Specifically, stocks yielding over 4% are recommended for their reliable returns, particularly in light of economic growth projections that favor continued stability in dividend payouts.
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%.
High-yield dividend stocks delivered an annualized return of 9.18% from 1973 to 2023, over double the return for non-payers at 3.95%.
With the federal funds rate below its long-term median and no cuts expected, high-yield dividend stocks should stay in favor over the next two years.
Contact a financial advisor for a complete portfolio review, especially if considering high-yield dividend stocks for your investment strategy.
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